DOF: Over P752B in loans, grants secured to fight COVID-19

MANILA, Philippines—The $1.2 billion in loans secured by the Philippines from multilateral institutions to buy vaccines have inflated total borrowings and grants for COVID-19 response to $15.49 billion, or more than P750 billion to date, the Department of Finance (DOF) said.

The updated list of financing that the DOF obtained to boost the Philippines’ COVID-19 war chest as of April 8 included loans amounting to $500 million from the Washington-based World Bank, $400 million from the Manila-based Asian Development Bank (ADB) and $300 million from the Beijing-based Asian Infrastructure Investment Bank (AIIB).

All three new loans were signed by Finance Secretary Carlos Dominguez III on behalf of the Philippine government last March.

Equivalent to over P58 billion, these three loans accounted for bulk of the P70 billion in unprogrammed appropriations for the mass vaccination program, which had been set aside in the P4.51-trillion 2021 national budget.

Last month, Finance Undersecretary Mark Dennis Joven said there was no need for additional loans yet to cover the balance of more than P11-billion.

In all, the national government allocated P82.5 billion for vaccine procurement and rollout in 2021, including P2.5 billion in the Department of Health’s (DOH) budget plus P10 billion released to the DOH last February under the Bayanihan to Recover as One Act or Bayanihan 2 law.

The government targets 70 million Filipinos, or the entire adult population, for vaccination by yearend to achieve herd immunity and reopen the economy after the longest and most stringent COVID-19 quarantine in the region.

The World Bank’s additional financing for the Philippines’ COVID-19 emergency response project already took effect on March 31, which meant the DOH, which is implementing the nationwide inoculation program, can draw from these funds to directly pay vaccine suppliers.

Joven had said the World Bank loan will cover vaccines purchased from Moderna Inc.

The ADB and AIIB’s combined financing of $700 million for the DOH’s $714.57-million second health system enhancement to address and limit COVID-19 (Heal 2) project has yet to take effect.

Once effective, the ADB loan will be disbursed for Novavax Inc.’s Covovax doses.

The AIIB loan, meanwhile, was its first-ever vaccine financing for member-countries.

These three latest vaccine loans formed part of project loan financing totalling $2.12 billion to date. These project loans went to specific projects, hence were not injected into the budget.

In 2020, the DOF secured $13.35 billion in foreign financing for budgetary support to COVID-19 response, mostly from loans extended by development banks as well as bilateral partners like France, Japan and South Korea.

The DOF also last year tapped offshore bond issuances, specifically the US dollar market where it ventured twice, to raise additional funds.

Also, the Philippines in 2020 received $26.74 million in grants from the ADB and the Japanese government for emergency pandemic response.

TSB